Whether you need a pitch deck vs a business plan will depend a lot on the type of business you are running or planning to set up.
Both these documents help entrepreneurs navigate their business over the next few years. And both these documents help investors in deciding whether to fund the business or not. However, where business plans are essential for traditional businesses that have a more concrete pathway to success, startups don’t require business plans. A pitch deck is more appropriate for a startup as a lot will change in the course of business.
In this post, we will discuss the differences between pitch deck and business plan and help you determine which one is necessary for your business.
The purpose of a pitch deck is to raise money from venture capitalists and angel investors. The purpose of a business plan is for traditional businesses or late-stage companies to raise money from investors and banks and also to forge partnerships with other organizations.
A pitch deck serves a summary to help investors get a decent understanding of the business and helps create opportunities for entrepreneurs to get meetings with venture capital firms and angel investors. Business plans on the other hand serves as full-proof research to help investors understand whether they should invest.
As mentioned previously, pitch decks are more apt for tech startup companies whereas business plans are prominently used by established businesses, small or big.
Pitch decks can range between 10-50 pages and depend on the stage of the startup. For example, investors who invest in very early-stage startups require not more than a 10-page pitch deck. However, as the startup grows and raises more money, investors who come in at a later stage would want more information and might require a detailed pitch deck that can range up to 70 pages.
Business plans on the other hand are very detailed as cover every aspect of the business and can easily be 100 pages long. A business plan can even contain forecasts for the next 5 years.
A pitch deck focuses on the team, product, market, and traction metrics. These are 4 primary features investors look at to decide whether to invest or not. And these features can easily fit into a 10-page deck.
When the relevant audience looks at a business plan, they want to know if the business they are getting into is/can be profitable and also runs stable operations. In other words, since business plans look at a much longer-term, it includes a lot of details.
Pitch decks are more visual compared to business plans and are presented vocally to an audience or a set of investors. Business plans are presented verbally as they are read by the relevant audience. Since business plans are longer, they are not presented to an audience.
Pitch decks are usually created with software like Microsoft PowerPoint or Google slides. There is also other software like Prezi and Slidebean which specifically help in preparing pitch decks.
Business plans are usually prepared in Word format as they are heavily text-based.
These are the key differences between startup pitch decks vs business plans. If you enjoyed reading our post, please read our other business-related posts on our blog